Business
By Wealth Ufford
THE Country Managing Partner, DLA Piper Africa, Bola Tinubu, says that Environmental, Social and Governance, ESG, considerations have evolved from being a documentation requirement to becoming a key determinant of financing and investment decisions across African markets.
Speaking during a panel session at the FITC Sustainability and ESG Conference 3.0, she said that while ESG was once treated as a routine compliance exercise, it now plays a substantive role in shaping the structure and pricing of transactions.
According to her, lenders and investors are increasingly linking financing terms to companies’ sustainability performance, with borrowing costs rising or falling depending on whether agreed sustainability targets are achieved.
She explained that ESG due diligence has also become a critical condition for many transactions, influencing deal pricing, contractual terms, risk allocation and in some cases, whether an investment proceeds at all.
“Today, the cost of capital is increasingly tied to a company’s environmental, social and governance performance,” she said.
While acknowledging that some smaller domestic transactions still treat ESG as a “tick-box” exercise, Tinubu stated that the overall direction of the market is clear, with sustainability becoming an integral part of investment decision-making.
She observed that the greatest challenge in Africa lies in bridging the gap between recognising the importance of ESG and implementing it effectively across businesses and institutions.
To help organisations prepare for the changing investment landscape, she outlined four key recommendations.
She said that companies should embed sustainability into their corporate governance structures from the outset, treating ESG with the same level of importance as financial performance rather than as a pre-transaction formality.
She urged organisations to move beyond disclosure by identifying sustainability gaps and implementing time-bound action plans with clearly assigned responsibilities and board oversight.
Emphasised the need for companies to establish credible systems for collecting, measuring and verifying ESG data, she noted that reliable information is essential for demonstrating sustainability performance to investors and financiers.
She added that organisations should view strong governance as a competitive advantage, arguing that companies with robust governance frameworks should leverage that strength to negotiate better financing terms and improve access to capital.
According to her, businesses that invest in sound governance and credible ESG practices will be better positioned to attract investment and remain competitive as sustainability expectations continue to shape global financial markets.
W.U
July 9, 2026
Tags: Bola Tinubu